The Naira on Tuesday recorded a mixed performance as the currency faced renewed pressure at the official window while holding its ground in the parallel market.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) indicated that the Naira closed today at ₦1,375 per US Dollar. This represents a depreciation of 0.80% (₦11) from the previous session’s close of ₦1,364/$.
Market reports indicate that intraday trading saw significant fluctuations, with the currency hitting a high of ₦1,385 and a low of ₦1,358 before settling at its closing price.
The downward pressure on the Naira is largely attributed to sustained demand from importers and a slight tightening of dollar liquidity at the official window.
Financial analysts suggest that global economic sentiments, including a move toward safe-haven assets due to geopolitical tensions, have further bolstered the strength of the US Dollar against emerging market currencies.
In the parallel market, commonly referred to as the black market, the exchange rate remained relatively stable compared to the official window. Bureau De Change operators in major hubs like Lagos and Abuja reported trading rates between ₦1,390 and ₦1,410 per Dollar.
The narrow gap between the official and parallel rates is seen by some experts as a sign of the Central Bank of Nigeria’s ongoing efforts to achieve exchange rate convergence and reduce arbitrage opportunities.
Despite the daily slip in value, Nigeria’s external reserves have shown resilience, currently hovering around $48.36 billion.
This buffer, supported by relatively high global crude oil prices with Brent crude trading above $104 per barrel provides the Central Bank with the necessary ammunition to intervene in the market and prevent extreme volatility.